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17.09.2003 Business & Finance

Ministry to set up Authority for privatisation of Railway sector

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Accra, Sept. 17, GNA - The Ministry of Ports, Harbours and Railways is to establish a Ghana Railway Development Authority (GRDA) to regulate rail transportation in the country.

The establishment of the Authority has become necessary for the successful implementation of the privatisation of the Sector. Professor Christopher Ameyaw-Akumfi, Sector Minister, told Journalists in Accra on Wednesday that the Ministry had submitted a draft Railway Act to the Attorney General's Department for review and acceptance for subsequent promulgation to give legal backing to the Authority.

The Minister said these formed part of the processes towards the concession of an aspect of the Railway Sector to private management. Prof. Ameyaw-Akumfi said the need for the establishment of the Authority and the concession of the railway sector was necessitated by persistent operational deficiencies that continued to inhibit the performance of the Sector.

The Ghana Railway Company Limited (GRCL) currently has four per cent of freight and one per cent of passenger in the transport. He said lack of effective management in the Sector had resulted in the diversion to road transport of other traditional railway shipments like timber, cocoa, petroleum products and cement.

"Similarly, GRCL has lost much of its long-distance passengers to road transport," he said.

Prof Ameyaw-Akumfi said as part of the efforts aimed at revamping the Transport Sector, government had decided that the Sector would be managed and operated by a private operator, under the concession arrangement.

Objectives of the concession include, the introduction of private sector participation (PSP) in the management and operation of the railway and to make rail operations efficient and financially viable. The winner of the concession bid would operate the Western (Takoradi-Kumasi), Central (Huni Valley-Kotoku) and Eastern (Accra-Kumasi) lines and own only the moveable assets of the company for the concession period of 20 years.

Under the terms of agreement, the concession period may be extended for five years. The concessionaire is expected to pay annual fees to the government while the government also subsidises passenger fares. The Ministry would hold a bidders conference next week for investors to access credible, accurate and relevant information as part of efforts to ensure that the PSP in the sector is transparent. Prof. Ameyaw-Akumfi said the Accra-Tema suburban railway would be given out separately.

Mr Samuel Kokovena, General Secretary of the Ghana Railway Workers Union, touched on issues bothering on redeployment and said acceptance of the privatisation process was high among the work force.

He said the workers recognised the need to reform the Sector because they could not continue to operate under the present conditions of inefficiencies and continued deterioration of assets.

He, however, expressed the hope that the redeployment exercise would affect very minimal number of staff while appropriate measures were taken to give the affected staff their entitlements.

The deadline for the submission of bids for the privatisation process is December and the concessionaire is expected to commence work by the second quarter of the 2004.

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